On July 18, the FTC and partners from the FCC, state attorneys general, and other state and federal agencies announced Operation Stop Scam Calls, an effort involving 102 participants and 180 total state and federal enforcement actions. In particular, the FTC announced five specific new enforcement actions against the following organizations:
Sam Levine, Director of the FTC’s Bureau of Consumer Protection, highlighted two particular learnings for those reviewing the actions of Operation Stop Scam Calls.
Levine highlighted a commitment to going after what the FTC calls “consent farms” or organizations obtaining personal details and “phony consent” from consumers to then sell to “unscrupulous telemarketers.” Levine condemned the often unclear consent collection practices utilized by third-party lead generators and stated that all lead generation by third parties was viewed as illegal under the FTC’s Telemarketing Sales Rule, confirming that all consent for robocalls must be collected directly from the consumer.
As a demonstration of its commitment to pursuing enforcement against alleged consent farms and those empowering third-party lead generation, the FTC has filed a proposed order requiring Fluent to pay a $2.5 million penalty and banning Fluent from “engaging in, assisting, or facilitating robocalls.” The FTC alleged that Fluent “has operated as a consent farm lead generator,” collecting lead information to sell to third-party marketers. The FTC alleged, “From January 2018 to December 2019, through these practices, Fluent obtained and sold more than 620 million telemarketing leads.”
Soundboard technology allows live call agents or AI to select and play audio from sets of prerecorded responses to fit the intended message rather than speaking directly to the call recipient. It allows callers to standardize the language, voice, and accent used in calls without call recipients becoming aware that they are not speaking directly to a live agent.
In 2020, the FCC issued a declaratory ruling rejecting petitions from NorthStar Alarm Services and Yodel Technologies asking the FCC to declare that soundboard technology was not “using an artificial or prerecorded voice” under the Telecom Consumer Protection Act (TCPA) because live agents controlled the soundboards. The FCC confirmed that soundboard technology was considered artificial or prerecorded voice and therefore required prior express consent of the called party.
The FTC has now issued a complaint against Yodel Technologies and its owner Rober Pulsipher for its use of soundboard technology to allegedly initiate more than 1.4 billion calls to U.S. consumers between January 2018 and May 2021, with a proposed order imposing a $1 million civil penalty (of which they will pay $400,000) and a ban from participating in telemarketing. As of July 18, 2023, Yodel’s website appears to no longer be operational.
In addition to the critical learnings shared by Sam Levine, support and urgency to join together to address the severity of the issue was voiced across the U.S. Department of Justice, the FCC, and members of state AG offices.
Arun G. Rao, Deputy Assistant Attorney General, U.S. Department of Justice, Consumer Protection Branch, summarized recent enforcement efforts pursued by the DOJ against alleged illegal callers and those facilitating illicit calls.
Loyaan A. Egal, Chief of the Enforcement Bureau of the Federal Communications Commission, discussed the FCC’s role in regulating communications service providers in an effort to stop illegal calls and highlighted enforcement actions. Egal reinforced the need for service providers to implement Know Your Customer (KYC) principles and practices. Egal also highlighted the FCC’s efforts to work with mobile phone device manufacturers Apple, Google, and others to find solutions to combat illegal text messages.
Dave Yost, Ohio Attorney General, confirmed his commitment to stopping illegal calls. Yost stated that VoIP services are “the bottlenecks by which predators get into America,” noting that law enforcement may not be able to track down an operator in Serbia but can track down how said operator delivers calls to the United States. Yost confirmed the goal was to deliver the following message to illegal callers - “Don’t try it in America.”
Kwame Raoul, Illinois Attorney General, confirmed he was “more than annoyed” with robocalls. Raoul stated that telephone providers initiating or passing through calls are responsible for using available tools to detect and cut illegal calls. Raoul highlighted the prior best practices released regarding the mitigation of illegal calls. He confirmed that service providers should commit to knowing their customers, knowing their traffic, participating in call authentication, cooperating with law enforcement through the traceback process, blocking illegal calls, and participating in rulemaking processes by offering comments to the FCC.
As stated by Director of the FTC’s Bureau of Consumer Protection, Sam Levine, during the announcement of Operation Stop Scam Calls, “Take steps to keep illegal calls out of the country, or the next call you get might be from the FTC.”
If you’re a service or platform provider and haven’t taken the necessary steps to verify and monitor the traffic originating or traversing your network, you’re behind. If you think you’re above, around, or outside the law on this issue, you’re wrong. If you’re not sure where to start in implementing a KYC process robust enough to protect your network from becoming the target of the next FTC enforcement action, you can start here with Numeracle’s KYC Model Standards Guide or reach out to us at www.numeracle.com/contact to learn more.